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Know the Hidden Costs of New Construction

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Buying new construction can seem like a good way to avoid a lot of the headaches that come with older homes. With things built to your specifications and brand new everything, you’ll pay a lot less in decor and maintenance costs. But new builds do have some hidden costs that could end up putting a big dent in your wallet.

Here’s what you need to know:

1. Understand that the model home is like the top trim package on a car–it has all of the upgrades. And those upgrades probably cost thousands of dollars. When you tour the model home, pay attention to the things that will definitely be in your house like the layout.

2. Know what’s included in the base model. Some base models come with appliances and all of your home necessities included while others come with just the bones of the house. It depends on the builder, but you need to know exactly what you’re walking into.

3. Read the warranty. Not all builder warranties are the same, and they will cover different things. Make sure you understand what will and won’t be covered so you aren’t surprised down the line.

4. Use your own agent. The agents working at the new construction are the builder’s agents–not yours. That means they work to get the builder the best deal possible, even at your expense. Protect yourself and get a fair deal by hiring your own buyer’s agent.

If you’re looking for an agent to make sure you get the best deal while buying new construction, just send give us a call! Chris 480-754-9077 & Cheryl 480-754-9477

new construction

Home Projects with Maximum ROI

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Do you ever come home to your perfectly nice house and just have the urge to redesign all the things? Sometimes I think about __________ or __________ (redoing our kitchen/finally putting a spa tub in the master bathtub/building a pool).

If you have the urge to make some changes to your home this year, it’s always good to keep ROI in mind. Sure, there are plenty of projects that are purely for enjoyment (like that spa tub!) but here are a few home improvements that can actually improve the resale value of your home:

  • ???? Minor Kitchen Remodel
  • ???? Minor Bathroom Remodel
  • ???? Exterior Improvements
  • ???? Garage Door Replacement
  • ???? Paint in a Neutral Palette

What is one home improvement project that you would love to tackle this year, practical or not?

house painting

Are Home Warranties Worth the Cost?

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kitchenAs a home buyer or home seller, you may have wondered whether a home warranty is worth the cost. Homeowners insurance protects your home against unforeseen accidents or damage.  A home warranty, on the other hand, is a supplement to this insurance. Simply put, a home warranty is a convenience program that covers normal wear and tear on the major electrical and mechanical systems in a home, typically for a one-year period.

A home’s ventilation, heating and air-conditioning, plumbing, water heater and kitchen appliances are typically covered by a home warranty. However, be sure to read the fine print on any home warranty. Be sure to note what exactly is covered and what isn’t.

Another wrinkle with home warranty plans is that they don’t offer quick fixes to any problems that are discovered within the home. Home warranties are not the same as emergency home service contracts, where the homeowner can make a phone call and have the problem diagnosed and fixed within the same day.  Instead, with a home warranty, the homeowner will have to file a claim, and the home warranty company will choose a local service contractor to diagnose the problem for a service fee, which isn’t covered by the warranty.  Then, the claim must be approved by the company.

While a home warranty can be a nice back-up plan, it’s critical that any homeowner identify any necessary repairs during the home inspection period.  The home inspection will typically uncover any major issues with the maintenance of the home, and will set a precedent for regular service of the major mechanical services. For example, some home warranty companies won’t cover an air-conditioner that hasn’t been serviced in a past set number of months. Therefore, having this done during the home inspection negotiation period will help to set up a seamless transition to the home warranty service period. Home warranties in Arizona average around $400-500 depending on the size of the home.

Click here to begin the search for your next home! 

Considering An Investment Property?

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condo photoDid you move to the valley and start by renting an apartment, condo or single-family home? We known so many people who moved here and started renting off the bat – they were able to get an impression of neighborhoods and find out where they wanted to buy. 

We also know some of them that haven’t decided to become homeowners at all. It fits with the national trend of home-ownership rates dropping from 70 percent down to 65 percent. And a third of those renters are leasing out single-family homes, not apartments. 

What does this mean for you? Investment properties, of course! Phoenix has a strong demand for housing, and paired with the popularity of renting, this is a good time for those interested in rental properties to strategize. 

The good: Buying an investment property is a way to diversify your holdings, and renting increases cash flow.

The challenge: Are you prepared to make the right choice in property, and to maintain it while working with tenants?  Do you have the means and some extra time to deal with issues that might come up? 

If you’re not daunted by the idea of after-hours calls and taking care of surprise repairs, then investing in a rental home can be a solid decision for your financial future. Arm yourself with resources (or an experienced partner) to help choose the best property that fits your criteria. As a first-time investor, it’s important not to put too much on your plate – fixer-uppers and large, expensive properties can set you back. 

You should also be aware that investment properties incur a large down payment; since mortgage insurance isn’t available for the rental property, you’ll need at least 20 percent down for traditional financing. And that is just the start of the numbers: Break out that calculator to check your margins, operating expenses and the return on your investment for your efforts.  A study showed rental properties in Phoenix returned an annual average 8.7 percent, which is quite high. If this sounds like a venture for you, contact us!